How would YOU fix the housing market? Property expert David Orr of Gresham House

Whether it’s unaffordable house prices, higher mortgage rates, rising rents or increased homelessness: the housing market seems to be stuck in an endless crisis.

There remains an insatiable appetite to buy real estate. Many of those who do not own property strive and put their savings towards achieving it.

It is a dream that is increasingly out of reach for many, as the chronic shortage of housing causes house prices to rise and rents to rise.

Those who already own tend to want more. Whether that means buying a bigger and better house, buying a holiday home or investing in buy-to-let, the British obsession with acquiring property doesn’t stop at the former.

Owning real estate has become synonymous with both wealth creation and wealth preservation, and as the money continues to flow in, prices continue to rise.

Government interventions often seem to add fuel to the fire. Stamp duty holidays, Help to Buy, Right to Buy and other schemes were aimed at helping more people onto the ladder.

But while many of these initiatives were successful, they also had the effect of further increasing house prices for subsequent initiatives.

Worst of all, homelessness is increasing. According to research by the charity Shelter, more than 300,000 people are homeless in England, many of whom are in temporary accommodation.

In the new series This is Money, we speak to a property expert every week to ask them what’s wrong with the UK housing market – and how they would fix it.

This week we spoke to David Orr, chairman of Gresham House Registered Providers, an asset manager that invests in social housing.

He is the former CEO of the National Housing Federation.

Does Britain have a housing crisis?

David Orr replies: It’s clear we have a housing crisis. We ended up here because we haven’t had a good housing strategy for decades.

We have consistently failed to build anywhere near the number of new homes we needed to accommodate a growing population and changing family compositions.

The worst part is that we have more children living in temporary accommodation, often of very poor quality, than we have ever had in our entire history.

There are also more people sleeping on the streets than we have had in a long time.

And we have more adults in their 20s and 30s living at home with their parents.

We have huge indicators of a system that is broken in several parts of the market.

– Read: What next with the mortgage interest rate in 2024 – and for how long should you fix the mortgage interest rate?

How does this compare to the past?

Comparisons with the past are always difficult in terms of availability and affordability of housing.

The quality of housing has obviously improved, but it is more difficult to access affordable housing today than at any time since the 1950s.

What was the biggest cause of the housing crisis?

First, we haven’t built enough houses, period. We do not have a housing supply that can keep up with the growing and changing demand.

Second, we never had a good long-term plan. Housing is a commodity that lasts a very long time.

When people build new homes, they invest in the future.

And if you only have governments taking short-term measures or initiatives, with an eye on the politics of the next six months rather than the housing of the next sixty years, then you will end up with the kind of mess we have now. now.

We have been plagued by ‘initiative-itis’ as yet another new minister comes along and announces that they are going to pour money into something new, without any connection to the fundamental underlying problems in the way housing is delivered.

I think every housing study done over the last ten to fifteen years has ultimately concluded that the fundamental problem is that we don’t have a coherent plan.

How would you solve the crisis?

I would build 300,000 new homes a year, of which at least 40 percent would be social and affordable rental housing. I would do it in a way that builds mixed-ownership communities.

We have also experienced a cost of living crisis, with one of the big challenges being people being able to afford to heat their homes.

We could have solved that problem years ago by investing more in improving the insulation of our homes, so that people had to spend less on energy.

We have worked on this over the years. In 2022, Gresham House Registered Providers built a project in Stanford-le-Hope, Essex, using insulation, low carbon and battery technologies, giving new owners zero energy bills.

I think Britain should have made greater use of compulsory purchase, where councils can acquire land without the owner’s consent to enable property development.

At the moment, anyone who owns land can get a huge and completely indefensible increase in income if he or she gets planning permission to build houses, and we all need to rebalance that.

Housing needs political support from all parties, as we have done with climate change for example, and the most important thing is to have a clear long-term strategy that the whole industry and the whole country can then get behind in trying to deliver.

Do you think the housing crisis will ever be solved?

I have stood on public platforms and said that the current crisis was neither inevitable nor accidental.

This didn’t happen by accident – ​​it happened because of decisions we as a nation made or didn’t make.

It’s because of the decisions we’ve made about investments and land values ​​and where we spend our money, and it’s happened because there have been a lot of people who have had an interest in seeing a shortage of supply so that the price of their house would valleys. continues to rise by far more than inflation.

If the problem arose because of those decisions or lack of decisions, then it can be solved by making other decisions. I don’t think there is any mystery to all this.

I think it is possible to solve the crisis, but not quickly. It’s more likely that this problem can be solved by doing it strategically and coherently – by having a long-term plan and being willing to invest in it year after year.

There also needs to be a mechanism to test the progress we make against that plan.

I’m still optimistic enough to believe that we can solve this problem as a nation. But in order to do that, we must decide that it is in all our interests to solve the problem and do it ourselves.